Hi Gaurav,
When you enter a purchase price in the PO, the cost price will be updated at the moment of invoice posting. If you have set on your item model group that also physical value should be included, this will also have the cost price updated in AX at the moment of posting your product receipt.
The cost price field on the sales order is important at the moment of a retuned item.
Otherwise an average cost price will be used for posting your packing slip. If no cost price is know at this moment, it is 0.
You have to run the inventory recalculation/closing regulary to have the correct cost prices updated on the inventory transactions. With this recalculation the WA costing method will be applied.
During e.g. a month a temporary average costprice will be used for issued item transactions. If you run the recalculation at the end of the month, the appropriate costing method will be applied. Note that your margin can show other figures after a recalculation.